The Obama Gamble

Most of my training as a statistician had lead me to view most real life outcomes a probability instead of certainties. Regardless of what I really think will happen, there is a change that what I think is wrong. For me that is a given assumption, what really matters is the probability.

For example suppose you play a game with only two possible outcomes, you either win $1000 or lose $10000. You might play this game if there was at least a 90% chance of winning, but might not if there was only a 60% chance. A statistician would decide whether this game was worth playing by calculating something called the expected value. Basically, if you know the dollar value and probability of each outcomes; you can calculated this quantity. If it is positive you would play the game, if not you wouldn't.

Similarly, Obama is betting that if we borrow and spend enough money on healthcare, energy, and education, we will save money on healthcare in the future, make money from a new energy economy, and a make money from better educated public. There is also chance as in the words of Rush Limbaugh that he fails. As a statistician, I would like to ask the following question in today's townhall meeting:

I would like to know your administration's estimated dollar amount gain assuming you succeed as well as the estimated dollar loss if you fail. I would also like to know your estimated probability of these two events.

Somehow I feel as if the question is a little wonkish, but I think the debate over the estimates the White House provided would create quite alot of chatter in the analytical community.